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The financial elite has opposed Bitcoin and other cryptocurrencies for quite some time now. Most of these people got rich through traditional finance and see no merit in Bitcoin because it can’t be controlled or manipulated to their liking. Thomas Peterffy, the richest person in Florida, isn’t a big fan of Bitcoin either. In fact, he claims that the world’s leading cryptocurrency will destabilize the global economy.
BITCOIN IS MORE POWERFUL THAN PEOPLE THINK
Readers of the Wall Street Journal will have noticed the massive full-page advertisement related to Bitcoin in Wednesday’s edition. That ad was paid for by Thomas Peterffy, the founder and chairman of Interactive Brokers LLC, a firm specializing in futures brokerage. Bitcoin is a very real threat to its current business model, to say the least. At the same time, the demand for Bitcoin futures has never been higher, and there are new business opportunities waiting to be explored.
In his open letter, Peterffy claims that Bitcoin is a very serious threat to the economy as we know it, and that it may serve as a destabilizing force given that the US economy is almost at a tipping point. This simply confirms that the wealthy elite don’t want the current financial situation to change unless they can benefit from it. With the rise of Bitcoin, that appears to be a lot harder than most entities would like.
Taking out a full-page newspaper ad will not necessarily help Peterffy’s case, though. Seeking to restrain Bitcoin and other cryptocurrencies from using the same clearing services as financial products is a rather odd request. This is akin to putting forth that only accredited investors should have access to this new form of money. He doesn’t propose a viable alternative either, but merely wants to see Bitcoin disappear once and for all. When the wealthy elite starts asking the government to ban something, you know the situation has changed in favor of the underdog.
Moreover, Peterffy’s ad claims there is no fundamental basis on which Bitcoin may be valued. While that statement may be true, it also applies to futures contracts, bank-issued money, and any other financial tool the world possesses today. It is always intriguing when wealthy individuals try to plead their case without knowing how finance works at its core. Then again, we have seen similar comments before and they usually fall on deaf ears.
For some reason, a lot of people still think governments can “ban” Bitcoin. They can try to, but it would not be in their best interest to do so. Introducing taxation guidelines would be a far more beneficial approach for any government, even though it’s also difficult to enforce taxation on something no government or bank controls or issues. It is certainly true Bitcoin and other cryptocurrencies can and will destabilize the economy, but not for the reasons Peterffy may think.
For an individual with a net worth of US$13.8 billion, such comments regarding Bitcoin seem petty at best. While he is entitled to his opinions, they don’t make much sense when looking at the bigger picture. If a Bitcoin bubble were to occur, it would have major ramifications. However, these consequences pale in comparison to a stock market crash or the bankruptcy of one of the world’s biggest banks. All three events are equally likely to happen, but not necessarily in that order.